Flash Report
Consolidated Basis
Results for Fiscal 2008
(April 1, 2008―March 31, 2009)
April 28, 2009
Nippon Steel Corporation
Tokyo, Osaka, Nagoya, Sapporo, Fukuoka stock exchanges
5401
http://www.nsc.co.jp/en/index.html
Shoji Muneoka, Representative Director and President
Hiroyuki Marukawa, General Manager, Public Relations Center
81-3-3275-5014

Company name:
Stock listing:Code number:
URL:
Representative:
Contact:
Telephone:
Scheduled date to Ordinary General Meetingof Shareholders:
Scheduled date to payment of dividends:
Scheduled date to submit Securities Report:

June 24, 2009
June 25, 2009
June 24, 2009

（Figures of less than ¥1 million have been omitted.）

1. Consolidated Financial and Operating Results through Fiscal 2008
(April 1, 2008―March 31, 2009)(1) Consolidated Operating Results（Percentage figures are changes from the same period of the previous fiscal year.）Net sales

Operating profit

Ordinary profit

Millions of yen%

Net income

Millions of yen%

Millions of yen%

Millions of yen

Fiscal 2008

4,769,821(1.2)

342,930(37.1)

336,140(40.4)

155,077(56.3)%

Fiscal 2007

4,826,974

12.2

545,580(6.0)

564,119(5.6)

354,989

1.1

Net income per share

Net income per shareafter full dilution

Return on
EquityReturn on
AssetsReturn on
Sales

Yen

Yen

%

%

%

Fiscal 2008

24.61

23.71

8.7

6.7

7.2

Fiscal 2007

56.33

53.52

18.7

10.7

11.3

(For reference) Minority interest in net income of consolidated subsidiaries: Fiscal 2008 ¥58,876 million
Fiscal 2007 ¥52,507 million(2) Consolidated Financial Results
Total assets

Net assets

Millions of yen

Ratio ofshareholders’ equity
to total assets

Net assets per share

Millions of yen%

Yen

Fiscal 2008

4,870,680

2,174,809

34.3

265.24

Fiscal 2007

5,193,498

2,413,954

36.8

303.34(For reference) Shareholders’ equity: Fiscal 2008 ¥1,668,682 million
Fiscal 2007 ¥1,908,777 million(3) Consolidated Statements of Cash-Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen
128,390
160,313

Fiscal 2008

127,540(306,603)

170,209

Fiscal 2007

525,777(438,121)(200,604)

12. Dividends
Dividends per share
Base date

End of first quarterEnd of second quarterEnd of third quarterEnd of fiscal year

Yen

Yen

Yen

Yen

Yen

Fiscal 2007

―

5.00

―

6.00

11.00

Fiscal 2008

―

5.00

―

1.00

6.00

Fiscal 2009 (Forecast)

―

―

―

―

―

Ratio of cash dividends
to net income

Cash dividends

Full fiscal year

Ratio of cash dividends
to net assets

Millions of yen%%

Fiscal 2007

69,337

19.5

3.7

Fiscal 2008

37,81824.4

2.1

Fiscal 2009 (Forecast)

―――

―――

―――

Note: The dividend forecast is not decided since the level of that is set based on the consideration of the forecast for performance. The
Company has decided to propose to give notice of dividend policy of end of second quarter when announcing the financial results for the firstquarter of fiscal 2009, and that of end of fiscal year when announcing the financial results for the third quarter of fiscal 2009.

3. Consolidated Financial Forecasts for Fiscal 2009 (April 1, 2009―March 31, 2010)(Percentage figures are changes from the same period of the previous fiscal year.)Net sales
Millions of yen

Operating profit%

Millions of yen

Ordinary profit%

Millions of yen%

First half of fiscal 2009

1,500,000(42.4)(100,000)―(100,000)―

Fiscal 2009

3,500,000(26.6)

0(100.0)0(100.0)Net income
Millions of yen
First half of fiscal 2009
Fiscal 2009

Net income per share%

Yen(60,000)―(9.54)

0(100.0)0.00

Note: The forecasts are presented as tentative figures, since negotiations for product prices and materials prices are currently in progress, and
it is still impossible to predict with any certainty when the economy will recover.

4. Others(1) Changes in the state of material subsidiaries during the period (Changes regarding specific companies accompanying changes in thescope of consolidation): None
Newly included: ―Excluded: ―(2) Changes in principles, procedures, methods of presentation, etc., related to the consolidated financial statements (Changes in material
items that form the basis for the preparation and presentation of the consolidated financial statements)(a) Changes accompanying revisions in accounting principles: Yes(b) Changes other than those in (a) above: Yes
Note: For further details, please refer to the item “(7) Change in the Basic Material Items for the Preparation of the Consolidated
Financial Statements” on page 22-23.
(3) Number of shares issued (common shares)(a) Number of shares issued at the end of the period (including treasury stock)
Fiscal 2008
6,806,980,977 sharesFiscal 2007
6,806,980,977 shares(b) Number of treasury stock at the end of the period
Fiscal 2008
516,602,427 sharesFiscal 2007
514,477,120 shares

2

(For Reference) A Summary of Non-Consolidated Financial and Operating Results
1. Non-Consolidated Financial and Operating Results through Fiscal 2008
(April 1, 2008―March 31, 2009)(1) Non-Consolidated Operating Results（Percentage figures are changes from the same period of the previous fiscal year.）Net sales

Operating profit

Millions of yen%

Millions of yen

Fiscal 2008

3,128,694

12.4

252,965

Fiscal 2007

2,782,944

8.6

376,128%

Net income per share

Net income per shareafter full dilution

Yen

Yen

Fiscal 2008

17.29

16.84

Fiscal 2007

37.38

35.71

Ordinary profit

Net income

Millions of yen%

Millions of yen%(32.7)

203,661(42.3)

108,986(53.8)(6.5)

353,144(9.4)

235,897(5.2)(2) Non-Consolidated Financial Results
Total assets

Net assets

Ratio ofshareholders’ equity
to total assets

Net assets per share

Millions of yen

Millions of yen%

Yen

Fiscal 2008

3,374,010

1,208,835

35.8

191.78

Fiscal 2007

3,548,498

1,369,20638.6

217.22(For reference) Shareholders’ equity: Fiscal 2008 ¥1,208,835 million
Fiscal 2007 ¥1,369,206 million

2. Non-Consolidated Financial Forecasts for Fiscal 2009 (April 1, 2009―March 31, 2010)(Percentage figures are changes from the same period of the previous fiscal year.)Net sales
Millions of yen
First half of fiscal 2009
Fiscal 2009

Operating profit%

Millions of yen

Ordinary profit%

Millions of yen%

900,000(48.3)(105,000)―(95,000)―

2,100,000(32.9)(40,000)―(50,000)―

Net income

Net income per share

Millions of yen%

Yen

First half of fiscal 2009

(50,000)―(7.93)

Fiscal 2009

(30,000)―(4.76)

Note: The forecasts are presented as tentative figures, since negotiations for product prices and materials prices are currently in progress, and
it is still impossible to predict with any certainty when the economy will recover.
* Explanation of the appropriate use of performance forecasts and other related items
The forward-looking statements included in this flash report are based on the assumptions, forecasts, and plans of the Company as of the dateon which this document is made public. The Company’s actual results may differ substantially from such statements due to various risks anduncertainties. For further details, please refer to the item “Fiscal 2009 Forecast” on page 10-11.

3

1. Consolidated Operating Results(1) Operating Results Analysis
Operating Highlights for Fiscal 2008
Overview of Conditions in Fiscal 2008
The global economy exhibited characteristics of a simultaneous worldwide recession in fiscal 2008, as
the financial crisis in the United States seemed to worsen almost daily following the insolvency ofLehman Brothers Holdings, Inc. (United States), in September last year. The repercussions appeared in
the real economies around the world in the second half of the year with sharp price drops in the stock andcommodities markets, fluctuating currency exchange rates, and constrained corporate capital spending
and reserved private consumption.

The sense of an economic slowdown also grew in Japan as slowing export growth, ongoing sharp rises inresource prices in the first half, and other factors put pressure on corporate earnings. As the global
economy slipped deeper into recession, conditions in the Japanese economy started deteriorated in thesecond half. Production activity quickly decelerated, capital investment receded in major industries, andcompanies even implemented employment adjustments.

The repercussions became increasingly evident in the steel industry in the second half with businessslowing in all the key demand segments as overall steel demand evaporated more rapidly and on a wider
basis than ever before.

The result was nationwide steel production volume falling an unprecedented 13.2% year on year to 105.5
million tons, marking the lowest level in seven years since reaching 102.0 million tons in Fiscal 2001 andsetting a new record for the largest single-year drop and following the previous year when production wasat the highest level in 34 years.

In the extremely severe economic conditions, the Nippon Steel Group worked to ensure a steady flow ofrevenue and overcome the challenges in the management environment. The Group’s steelmaking andsteel fabrication business and five non-steel businesses—engineering and construction, urban
development, chemicals, new materials, and system solutions—all worked to respond rapidly to thechanging environment and develop business operations through autonomous management initiatives intheir respective fields.
4Performance Review by Business Area Fiscal 2008
The highlights of performance by business area were as follows:

Fiscal Year
Steelmaking and steel
fabrication
Engineering andconstruction
Urban development
Chemicals
New materials
System solutions
Total
Elimination ofintersegment transactions
Consolidated total

Net Sales
FY07
FY08

(Billions of yen)
Operating Profit (Loss)
FY07
FY08

4,038.6

3,994.5

307.0

475.9

386.6

359.8

24.6

21.4

70.1
212.1
59.9
161.5
4,929.1

93.8
289.0
76.1
165.3
4,978.7

3.9
0.8
(2.3)
11.4
345.6

12.6
21.0
0.5
14.7
546.4

(159.2)(151.8)

(2.6)

(0.8)

4,769.8

4,826.9

342.9

545.5

Steelmaking and Steel Fabrication
Steel demand in the steelmaking and steel fabrication business remained strong overall through the firsthalf of the fiscal year both in Japan and overseas despite a slowing construction industry in Japan anddeclining real demand in the United States as well as decelerating economic growth in the BRICs (Brazil,
Russia, India, and China).

At the same time, prices continued rising for steelmaking raw materials. The tight supply and demandconditions worldwide made to major increases in iron ore and coking coal prices unavoidable andbrought higher price levels in the markets for scrap, crude oil, and other materials.

In these conditions, the Company aimed to improve its revenue structure by continuing to rigorously cut
costs and enforcing other measures aimed at alleviating the underlying pressure to raise prices while
seeking the understanding of customers for revisions to its steel product prices.

When the business conditions in major demand areas deteriorated further in the second half, decelerating
corporate production activity and inventory adjustments in all the main demand segments led to sharp andwide-ranging drops in demand in the general merchandise segments as well as in the Company’s coresegment of high-grade steel.
5

In these conditions, to cope with the decline in demand, the Company took measures in the third quarterby reducing output by one million tons from the previous year’s level and in the fourth quarter byreducing the operating rates of its blast furnaces to unprecedentedly low levels. In addition, also in the
fourth quarter, the Company extended the periods of suspended blowing operations and implemented
intermittent schedules for steel-rolling operations. In the fourth quarter, the Company moved up thescheduled blowoff (suspension of operations) to renovate the No. 1 blast furnace at the Oita Works,
carried out the banking* of the No. 2 blast furnace at the Kimitsu Works, and implemented various
additional measures that results in a major reduction in steel production by nearly four million tons fromthe previous year. The result was the lowest fourth-quarter steel production and shipment volumes in the
Company’s history.
* Banking means stopping the air blast flow to temporarily halt production while maintaining furnace conditions to restart production in the
futureIn alliances and joint ventures, the Company and partner ArcelorMittal, of Luxembourg, are partiallyrevising plans, including postponements, for a continuous galvanized line that is being expanded at I/NKote in the United States to take into account the current sizeable contraction of the North American
automotive market.

While carefully monitoring the changes in the economic environment and reviewing its businessstrategies, the Company continued to deepen and expand its global supply network while taking steps toensure the long-term stable procurement of materials in anticipation of global economic growth andrecovery in steel demand in the medium and long terms. Specific initiatives included partially financing
the acquisition by Suzuki Metal Industry Co., Ltd. (a key Nippon Steel Group manufacturer conducting
secondary processing of the Company’s special wire rod products) of Haldex Garphyttan AB, (Sweden),a leading producer of valve spring wires, and also committing to participation with POSCO (South
Korea), in a cold-rolling mill in Vietnam.

In addition, with the aims of strengthening relations with USIMINAS (Brazil), an alliance partner andequity-method affiliate in South America, and of better responding to the needs of customers in Brazil
and throughout South America, Nippon Steel and major resource provider Vale reached an agreement for
the Company to acquire Vale’s voting stock in USIMINAS.

6

To ensure a stable supply of resources, together with other domestic steel manufacturers, general trading
companies, and POSCO, the Company has committed to acquiring an equity interest in NAMISA (ofBrazil), which is a producer and marketer of iron ore and a subsidiary of the leading steel company CSN(Brazil).

As part of its ongoing environmental activities and the Company’s strategic alliance with POSCO, a
Nippon Steel-POSCO joint venture commenced the construction of rotary hearth furnace-type reduction
furnaces at POSCO’s Pohang and Gwangyang works to support the companies’ allied operations
supplying recycled steel dust and reduced iron. This plant construction is proceeding with a schedule forgoing into operation this year.

We regret the concerns which may have been caused in the local community and among other parties by
the accidental fire that occurred on July 29 last year in the coal belt conveyor and coke gas pipe facilitiesof the coke furnace at the Company’s Yahata Works. After repair work and extensive measures toprevent recurrence, the No. 4 coke furnace resumed operation on September 22 last year and the No. 5
coke furnace resumed operation on December 12 last year.

In addition, in the Company’s subsidiaries, facts were made clear last May that part of work was notconducted according to standards and contract specifications and this caused serious concern amongclients and related parties. Thereafter, a thorough review was conducted of the Group’s quality control
systems, especially as regards Group companies and OEM outsourcing companies, with the aims of
putting measures in place to prevent recurrences of such issues and recover confidence.

Despite the active implementation of a wide range of improvements and changes during the year, theoperating profit of the steelmaking and steel fabrication business recorded declines from the previous
year, however, its net sales increased year on year.

Engineering and Construction
In the engineering and construction business, Nippon Steel Engineering Co., Ltd., is focusing on
developing its solutions-based operations in Japan in the areas of steel production plants, large-scale
distribution facility construction projects, and waste treatment facilities. Outside Japan, the company isconcentrating on securing orders for energy development related projects in Southeast Asia. The
company’s meticulous risk management and efforts to improve earnings on the project orders it
7

undertakes resulted in year-on-year increases for both net sales and operating profit. At the same time, theworsening economic conditions resulted in a decline in orders received during the year due primarily to
project cancellations and postponements.

Urban Development
In the urban development business, Nippon Steel City Produce, Inc., the Group’s real estate development
company, recorded a low contract rate level in the condominium market, reflecting the weak desire
customers have to purchase during the current period of deteriorating economic and employment
conditions. Demand is also down in the rental building market for corporate office space, and vacancy
rates are rising. In this severe environment, the Company made every effort to enhance its selectivity
when acquiring new properties and to accelerate the completion of the sale of its inventory of properties.
Nevertheless, urban development business net sales and operating profit both declined year on year.

Chemicals
In the chemicals business, Nippon Steel Chemical Co., Ltd., had a solid first half of the year supported bybuoyant demand in the coal tar and carbon materials fields and growing sales for circuit board materials
for mobile phone applications. In the second half, the sharp price fluctuations for crude oil and naphtha
and the extreme deterioration in product markets as demand disappeared worldwide strongly impacted
the performance of the chemicals business. Companies implemented inventory adjustments in all productmarkets, including in the electronics materials business segment, and the markets all but came to a
standstill. The company ultimately posted declines in both net sales and operating profit for year.

New Materials
Net sales plummeted for Nippon Steel Materials Co., Ltd., as results were strongly impacted by a sharp
drop in demand in the second half in the core markets of semiconductors and electronic materials and avirtual freezing of capital investment by major manufacturers. The company is enhancing its production
capabilities for carbon fiber and polysilicon for solar cells, which are giving indications of developing a
medium-term growth trend although some weakness in demand appeared in the second half as economic
conditions worsened.Amid these difficult conditions, the segment is working on thoroughgoing cost
reductions and improving profitability through optimization of production scale. The segment is also
undertaking new initiatives, such as deciding to begin manufacturing and sales of silicon carbide wafer
for use in power devices. Despite these efforts, net sales declined substantially from the previous year,
and the company was ultimately forced to record an operating loss.
8

System Solutions
In the system solutions business, NS Solutions Corporation develops comprehensive system life-cycle(SLC) solutions encompassing the planning, configuration, operation, and maintenance of IT systems fora wide range of customers in the manufacturing, distribution, financial, public-sector, and other industries.
The company has also begun providing services incorporating cloud computing* to improve customer
investment efficiency and accelerate responsiveness to changes in the business climate. Net sales andoperating profit declined year on year, primarily owing to the deteriorating business environments for its
corporate clients and the accompanying decline in systems investment.

* Cloud computing is a new Internet-based computer usage configuration enabling services that allow
users to access dynamically scalable resources via the Internet.

Sales and Earnings
In fiscal 2008, declines in both sales and income were reported, with consolidated net sales declining¥57.1 billion year on year, to ¥4,769.8 billion; operating profit decreasing ¥202.6 billion, to ¥342.9
billion; ordinary profit falling ¥227.9 billion, to ¥336.1 billion; and net income declining ¥199.9 billion,to ¥155.0 billion. The results were significantly affected by the steep cuts in production and shipment
volumes, primarily in the fourth quarter, and the substantial increases in raw materials procurement costs.

On a non-consolidated basis, net sales increased ¥345.7 billion year on year, to ¥3,128.6 billion;
operating profit declined ¥123.1 billion, to ¥252.9 billion; operating profit fell ¥149.4 billion, to ¥203.6
billion; and net income decreased ¥126.9 billion, to ¥108.9 billion

Fund Procurement
The Company conducted six issues of unsecured corporate bonds during fiscal 2008: issues No. 56 andNo. 57 each valued at ¥29.9 billion and ¥29.9 billion on May 23; issues No. 58 and No. 59 valued at¥30.0 billion and ¥10.0 billion, respectively, on September 2; and No. 60 and No. 61 valued at ¥30.0
billion and ¥15.0 billion, respectively, on December 2.

Fiscal 2009 Forecast
In fiscal 2009, the Company expects the worldwide economic and business conditions to continue
deteriorating and the extremely severe conditions for steel demand to persist. At the same time, signs ofimprovement are beginning to appear, including the record high for monthly automobile unit sales in
9China in March this year. Some countries have also begun implementing economic stimulus measures,and governments around the world are expected to take similar steps to improve the economic conditionsin their countries.

The Japanese economy is also showing some signs of revival. While the construction industry remains
stagnant, indications are appearing in some areas that suggest that conditions are beginning to improve.
Inventory adjustments are reaching an end in the automobile, electric machinery, and other industries,and some industries where production output levels had been reduced are starting to receive support fromthe continuing growth in export demand from China.

Regarding conditions in the steel industry, steel materials inventory levels started declining in January
2009, particularly inventories of the three sheet products (hot-rolled, cold-rolled, and coated sheets).
However, inventory levels remain high, and the Company believes that all of the first quarter of fiscal
2009 will likely be required to return to appropriate levels. On the other hand, from the second quarter
onward real demand is expected to start recovering with an accompanying rebound in production output
volume supported by the progress made in inventory adjustments in the main demand segments. The
economic stimulus measures undertaken in various countries are also expected to have a positive effect.

Real demand for the Company’s products is expected to continue to be sluggish in the first quarter.
Production output levels are also likely to remain low as steel material inventory levels settle back toappropriate levels. Due to the progress of the renovation of the No. 1 blast furnace at the Oita Works, theblowing-in date has been rescheduled from the first half to the second half or later. These developments
are expected to hold production and shipment levels to the levels recorded in the fourth quarter of fiscal
2008.

The operating conditions suggest that the very severe earnings conditions will persist in the first half offiscal 2009. While there are some positive trends, such as declining coking coal prices, production andshipment levels are expected to remain at historically low levels while the inventory valuations andproduct shipment payments for raw materials bearing the high prices that contracted in the previous fiscal
year continue to constrain earnings.

10

From the second quarter of the fiscal year onward, earnings are expected to steadily improve following
the completion of the inventory adjustments in the core demand segments as well as rising production andshipment volumes in tandem with a rebound in real demand.

Management will continue to put every effort into raising product sales and minimizing costs to ensure
the Company achieves a positive profit result for the fiscal year. Extensive steps will be taken to containcosts, including increasing the use of lower-priced materials and optimizing production line operations topursue minimum-cost operations while output volume remains low, reductions in compensation of
directors and postponing payment of directors’ bonuses, as well as restraining expenditures to the
maximum extent possible and introducing temporary suspensions of operations.

At this point, however, negotiations for product prices and materials prices are currently in progress, and
it is still impossible to predict with any certainty when the economy will recover. In consideration ofthese circumstances, the forecast amounts for the next fiscal year are presented at this time as tentative
figures.
2. Financial Analysis (Consolidated)
Assets, liabilities, net assets, and cash flow
Total consolidated assets at the end of the fourth quarter of fiscal 2008 were ¥4,870.6 billion,
representing a decrease of ¥322.8 billion from ¥5,193.4 billion at the end of fiscal 2007. Althoughinventories increased by ¥154.3 billion due to high raw material price, investments and others declined¥443.0 billion, which includes a drop in the value of investments and others.

Total liabilities at the end of the fourth quarter of fiscal 2008 amounted to ¥2,695.8 billion, comparedwith ¥2,779.5 billion at the end of fiscal 2007, a decrease of ¥83.6 billion. Interest-bearing debt (whichfrom the fiscal year under review includes lease obligations) stood at ¥1,454.2 billion at the end of the
fiscal year, representing an increase of ¥262.1 billion compared with ¥1,192.0 billion at the end of theprevious fiscal year. The decrease in total liabilities was primarily due to declines in notes and accounts
payable (¥143.4 billion), accrued income taxes and enterprise taxes (¥58.9 billion), and deferred tax
liabilities (¥124.6 billion), which includes a drop in the value of investment securities.

Net assets were ¥2,174.8 billion at the end of fiscal 2008, representing a decrease of ¥239.2 billion fromthe ¥2,413.9 billion at the end of fiscal 2007. Although the Company reported net income of ¥155.0
billion for the period under review, net assets decreased primary as a result of payments of a year-end
11cash dividend of ¥6 per share (totaling ¥37.8 billion) and a midterm cash dividend of ¥5 per share(totaling ¥31.5 billion) and declines of ¥212.0 billion in unrealized gains on available-for-sale securities
and of ¥108.2 billion in foreign currency translation adjustments. Please note that shareholders’ equity atthe end of the fiscal year under review amounted to ¥1,668.6 billion, and the ratio of interest-bearing debt
to shareholders’ equity (the debt/equity ratio) was 0.87.

Cash flows from operating activities for the fiscal year under review amounted to ¥127.5 billion. The
principal factors influencing operating cash flows were inflows from income before income taxes andminority interest of ¥281.0 billion and depreciation and amortization amounting to ¥273.7 billion. These
inflows were partially offset by outflows owing to the payment of income taxes of ¥205.6 billion and anincrease in inventories of ¥171.5 billion and other factors.

Cash flows from investing activities amounted to ¥306.6 billion, owing largely to securities investmentsof ¥73.5 billion to secure rights to raw materials and investments in production capacity of ¥295.5 billion
to prepare for growth in the world economy over the medium-to-long term and a recovery in steel
demand. As a result of these trends in operating and investing cash flows, free cash flows amounted to a
new outflow of ¥179.0 billion.

Cash flows from financing activities totaled ¥170.2 billion, as cash dividend payments of ¥69.3 billion
were more than offset by net increases in borrowings. As a result of the previously mentioned movements
in cash flows, the Company’s cash and cash equivalents at the end of the fiscal year under review
amounted to ¥128.3 billion.

12

Trends in Cash Flow Indicators
Fiscal year

2005

2006

2007

2008

2009

Ratio of net worth (%)
Ratio of net worth at market price (%)
Debt redemption term (years)
Interest coverage ratio (times)

30.7
47.2
2.4
24.9

36.9
66.7
3.1
23.7

35.4
99.1
2.5
31.1

36.8
61.2
2.3
30.2

34.3
34.0
11.4
6.5

Notes:
Ratio of net worth: (Net assets-Minority interests) / Total assets
Ratio of net worth at market price: Current aggregate value of shares / Total assets
Debt redemption term: Interest-bearing debt / Cash flows from operating activities
Interest coverage ratio: Cash flows from operating activities / Interest expenses* Each indicator is calculated from the figures in the consolidated financial statements.
* The current aggregate value of shares is calculated by multiplying the common stock price at term-end
by the number of shares outstanding at term-end.
* Interest-bearing debt covers all debt bearing interest (short-term loans, commercial paper, corporate
bonds scheduled to come due within one year, convertible bonds scheduled to come due within one
year, corporate bonds, other convertible bonds, long-term loans and lease obligations).
* Cash flow figures from operating activities in the consolidated statements of cash flows are used, andinterest expense figures from the consolidated statements of cash flows are used.

3. Basic Profit Distribution Policy and Dividends in Fiscal 2008 and Fiscal 2009
Nippon Steel’s basic profit distribution policy is to pay dividends from distributable funds inconsideration of the consolidated operating results of each fiscal year and such factors as capitalrequirements for investment and other activities aimed at raising corporate value and performanceprospects while also endeavoring to further reinforce the Company’s financial structure. The Company
has set itself the consolidated payout ratio target of approximately 20% (non-consolidated payout ratio
target of approximately 30%) for use as an indicator for the distribution of profits based on due
consideration of consolidated operating results. However, because the Company’s top priority for thetime being is to fortify the corporate financial structure, a temporary target of approximately 15%-20% isin effect for the consolidated payout ratio (non-consolidated payout ratio at approximately 20%-30%),

13

which is slightly lower than the standard level stated above. Interim and year-end dividend levels will be
set to maintain a consolidated payout ratio within the target ranges currently in effect.

The level of interim dividends is set based on the consideration of the dividend policy for the fiscal year,
the interim performance figures, and the forecast for performance for the full fiscal year.

In line with the dividend policy outlined above, the Company distributed a dividend payment for the endof the interim period of ¥5 per share at the end of the first half of fiscal 2008.

Regarding the payment of cash dividends from retained earnings, a consolidated net loss was reported in
the second half of the fiscal year, but because of the serious impact of the sudden changes in themacroeconomic environment and in view of the Company’s situation as regards retained earnings, with aview to paying a return to shareholders, the Company has decided to propose to the General Meeting of
Shareholders payment of a year-end dividend of ¥1 per share, as a result of which the dividend for thefull fiscal year will be ¥6 per share be paid (which will represent a reduction of ¥5 per share comparedwith the cash dividend of the previous fiscal year, and the dividend payout ratio on a consolidated basis
will be 24.4% and 34.7% on a non-consolidated basis)

The specific amount of dividends to be paid from retained earnings for the current fiscal year is still
undetermined.

14２． Corporate Group
Schematic Diagram of BusinessNippon Steel Group is comprised of the parent company Nippon Steel Corporation, 251 consolidated subsidiaries and73 affiliates accounted for by the equity method. The Group's overall businesses are categorized into several industry
segments: steelmaking and steel fabrication, engineering and construction, urban development, chemicals, new materials
and system solutions.The principal businesses and business relations of Nippon Steel and major subsidiaries andaffiliates are outline below.
◎Major consolidated subsidiaries◯Major affiliates accounted for by the equity method
Steelmaking and steel fabrication(248 companies including Nippon SteelCorporation)

Sale andpurchase of
products,
etc.

Processing,andtransportati
on andcargo
handling ofrawmaterials,
products,
etc., onconsignment○Godo Steel Ltd.
○Topy Industries, Limited○Sanyo Special Steel Works Ltd.
◯Nichia Steel Works Ltd○Nippon Steel Trading Co., Ltd.
○Mitsui Mining Co., Ltd.
◯Japan Casting & Forging Corp.
◯Krosaki Harima Corporation◯Taihei Kogyo Co., Ltd.
◯Geostr Corporation◯Daiwa Can Company◯Sanko Metal Industrial Co., Ltd.
◯Suzuki Metal Industry Co., Ltd.
◯Sanyu Co., Ltd.
◯Baosteel-NSC/Arcelor Mittal Automotive
Steel Sheets Co., Ltd.
◯UNIGAL Ltda.
○Companihia Nipo-Brasileira De
Pelotizacao◯Guangzhou Pacific Tinplate Co., Ltd.
OthersNippon Steel Corporation (Holding Company, Steel Making & Steel Fabrication)◎Nippon Steel & Sumikin Coated Sheet
Corporation◎Osaka Steel Co., Ltd.
◎Nippon Steel & Sumikin Metal Products
Co., Ltd.
◎Nippon Steel & Sumikin Stainless SteelCorporation◎Nittetsu Steel Pipe Co., Ltd.
◎Nippon Steel Logistics Co., Ltd.
◎Nippon Steel Shipping Co., Ltd.
◎Nippon Steel & Sumikin Welding Co., Ltd.
◎Nippon Steel Drum Co., Ltd.
◎Nippon Steel Blast Furnace Slag Cement
Co., Ltd.
◎Nittetsu Cement Co., Ltd.
◎Nittetsu Elex Co., Ltd.
◎Nittetsu Finance Co., Ltd.
◎Nittetsu Tokai Steel Wire Co., Ltd.
◎Nippon Steel Transportation Co., Ltd.
◎NS Preferred Capital Limited◎The Siam United Steel (1995) Company
Limited◎Siam Nippon Steel Pipe Co., Ltd.
◎Nippon Steel U.S.A., Inc.
◎Nippon Steel Australia Pty. Limited

Design,construction
andmanagementonconsignment

Lease of real

Service andoperational
outsourcing

Sale andpurchase of
products, etc.

Sales andpurchase of
products,
etc.

Systemdevelopment,
maintenance andadministration on
consignment

Engineering and construction(23 companies)◎Nippon steel Engineering Co., ltd.
OthersUrban development(11 companies)◎Nippon Steel City Produce, Inc.
OthersChemicals(17 companies)◎Nippon Steel Chemical Co.,
Ltd.
Others

New Materials(10 companies)◎Nippon Steel Materials Co.,
Ltd.
OthersSystem solutions(16 companies)◎NS Solutions Corporation
OthersSale andpurchase of
products, etc.

(Note)
Mitsui Mining Co., Ltd. changed the corporate name to Nippon Coke & Engineering Co., td. on April 1.
Of the subsidiaries owned by Nippon Steel at the end of this consolidated term (March 31, 2009), the companies for which
their stocks are listed (or publicly-traded) on any of the domestic stock exchanges are as follows:
Company name
Stock exchange where listed
Osaka Steel Co., Ltd.
First Section of the Tokyo Stock Exchange; First Section of the Osaka
Securities Exchange
NS Solutions Corporation
First Section of the Tokyo Stock Exchange

153. Management Policy
Regarding the outlook for the fiscal year ending March 31, 2010, in view of recent economic conditions,
we are implementing initiatives to focus all our resources and capabilities on sales and cost control toovercome the difficulties in the operating environment. Specific initiatives are described on page 7 of thisFlash Report in the section: “1. Consolidated Operating Results, (1) Operating Results Analysis, Fiscal
2009 Forecast.”
In the steelmaking and steel fabrication business, looking to the medium-to-long term, Nippon SteelGroup will continue to pursue two strategic objectives. As the Company’s core market is high- andmedium-grade steel products, it will, first, be taking the necessary measures to expand the crude steel
output capacity of the Nippon Steel Group to a level in excess of 40 million tons annually througheconomically efficient and reasonable investments in capital equipment and concluding capital
partnerships. At the same time, as its second strategic objective, with its competitive base of operations inJapan, Nippon Steel Group will aggressively expand its overseas production and sales with the goal of
making the transition to being a “Global Player.” Moreover, to strengthen its technological capabilities,
which are the source of the competitiveness of the Nippon Steel Group, the Group will continue to hone
its technological lead and its workplace advantages.
In other activities outside the steel business, amid the fast-changing business environment, the Group will
work to increase its lead in technology in those businesses, and, by developing new products and services
and offering solutions, will endeavor to increase profitability, improve its financial position, and thereby
solidify its market presence.
Through these initiatives, Nippon Steel Group will work toward achieving sustainable growth andcorresponding growth in corporate value.
Other activities aimed at gaining the trust and confidence of the market and society as a whole will be theaggressive implementation of environmental management and the maintenance of compliance withrelated laws and regulations. These activities will include reducing the Company’s CO2 emissions
through measures to promote energy saving and prevent global warming as well as develop
environmentally friendly products.
Regarding the Company’s Medium-Term Management Plan covering fiscal 2009 and subsequent years,
please note that the Company is currently preparing specific objectives and policies, based on the
management policies previously mentioned.

16

4. Consolidated Finacial Statements(1) Consolidated Balance Sheets

ASSETS
Current assets :Cash and bank deposits
Notes and accounts receivable
Marketable securities
Inventories
Deferred tax assets
Other
Less: Allowance for doubtful accounts

Millions of yen
March 31, 2008

March 31, 2009

124,007471,745
13,0381,021,543
91,532
164,131(5,442)

159,455
516,858
9,015
867,157
65,592142,031(7,685)1,880,556

1,752,424

463,986
922,357
330,784
9,436
93,265
1,819,830

468,315
959,955
319,651
76,801
1,824,724

12,133
1,504
5,946
464
20,05017,9791,580
3,543
23,103

957,392
52,731
145,668(5,549)1,150,243

1,396,521
31,832
170,004(5,112)
1,593,245

Total fixed assets

2,990,124

3,441,074

Total assets

4,870,680

5,193,498

Total current assets
Fixed assets :Tangible fixed assets :Buildings and structures
Machinery and equipment
Land
Lease assets
Construction in progress

Intangible fixed assets
Patents and utility rights
Software
Goodwill
Lease assets

Investments and others :Investments in securities
Deferred tax assets
Other
Less: Allowance for doubtful accounts

17LIABILITIESCurrent liabilities :Notes and accounts payable
Short-term loans and portion of long-term loans
due within one year
Commercial paper
Bonds due within one year
Current portion of lease liability
Accrued expenses
Allowance for losses on construction contracts
Provision for environmental remediaton
Other

March 31, 2009

476,571
342,545

Millions of yen
March 31, 2008

619,974
272,009148,000
43,2503,019
236,604
4,666
271,698

135,000
95,300226,872
3,384
5,402
364,003

1,526,354

1,721,947

324,967
585,446
6,966
35,450136,380

223,274
466,433
160,099
125,536

4,400

4,191

37,01338,891

39,23038,830Total long-term liabilities

1,169,517

1,057,596

Total liabilities

2,695,871

2,779,543

419,524
114,333
1,458,622(262,152)
1,730,328

419,524
114,364
1,377,823(261,272)
1,650,440

22,665(1,149)11,187(94,348)(61,645)

234,673(1,508)
11,247
13,923
258,336

506,126

505,176

Total net assets

2,174,809

2,413,954

Total liabilities and net assets

4,870,680

5,193,498

Total current liabilities
Long-term liabilities :Bonds and notes
Long-term loans
Lease liability(excluding current portion)
Deferred tax liabilities
Accrued pension and severance costs
Allowance for retirement benefits of directors
and corporate auditors
Reserve for repairs to blast furnaces
Other

NET ASSETS
Shareholders' equity :Common stock
Capital surplus
Retained earnings
Less: Treasury stock, at cost

Valuation and transaction adjustments:
Unrealized gains on available-for-sale securities
Deferred hedge income (loss)
Unrealized gains on revaluation of land
Foreign currency translation adjustments

Minority interest in consolidated subsidiaries18

(2) Consolidated Statements of Income
Millions of yen
Fiscal 2008
Operating revenues :Net sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Operating profit
Non-operating profit and loss :Non-operating profit :Interest and dividend income
Equity in net income of unconsolidated
subsidiaries and affiliates
Other

4,769,821
4,105,778
664,042
321,112342,930

4,826,974
3,952,976
873,997
328,417545,580

25,08524,55558,87652,50724,090108,051

27,456
104,519

19,813
95,029114,842
336,140

17,773
68,20785,980564,119

13,342
13,342

41,36641,366

68,402
68,402
281,079
145,113(31,753)
12,641
155,077

605,485
201,330
22,16427,001
354,989

Non-operating loss :Interest expenses
Other
Ordinary profit
Special profit :Gain on sales of tangible fixed assets
Special loss :Loss on valuation of investments in securities
Income before income taxes and minority interest
Income taxes - current
Income taxes - deferred
Minority interest in net income of consolidated subsidiaries
Net income

Fiscal 200719

(3) Consolidated Statements of Changes in Net Assets

Balance at March 31, 2008

Commonstock

CapitalsurplusRetainedearnings

419,524

114,364

1,377,823

Cash dividends(69,335)

Net income for fiscal year 2008

155,077

Acquisition of treasury stock

Millions of yen
Unrealized
Minority
Foreign
Deferred Unrealized
gains onTreasuryinterest in
currency
gains onhedge
stock,
availableincome revaluation translation consolidated
at costfor-saleadjustments subsidiaries
of land(loss)
securities(261,272)
234,673 (1,508)
11,247
13,923505,176(1,269)

Disposal of treasury stock
Decrease due to the change
in the number of consolidated companies
Reversal of unrealized gains on revaluation of land

(30)

211
(5,003)

177

59

Other change for fiscal year 2008(net)Total change for this fiscal year 2008
Balance at March 31, 2009

Balance at March 31, 2007

419,524(30)
114,333358(59)(108,272)

949(212,008)
22,665358(1,149)(59)
11,187(108,272)(94,348)949
506,126

80,7981,458,622(880)(262,152)

Millions of yen
Unrealized
Minority
Foreign
Deferred Unrealized
gains onTreasuryinterest in
currency
gains onhedge
stock,
availableincome revaluation translation consolidated
at costfor-saleadjustments subsidiaries
of land(loss)
securities(170,563)
438,056300
9,922(3,958)476,344

Commonstock

CapitalsurplusRetainedearnings

419,524

111,693

1,087,908

Cash dividends(69,966)

Net income for fiscal year 2007

354,989

Acquisition of treasury stock(94,516)

Disposal of treasury stock
Increase due to the change
in the number of consolidated companies
Reversal of unrealized gains on revaluation of land

2,671
5,533

4,369
(561)

(640)

Other change for fiscal year 2007(net)Total change for this fiscal year 2007
Balance at March 31, 2008

(212,008)

419,524

2,671
114,364

289,915
1,377,823

20(90,709)(261,272)(203,382)(1,809)1,325

17,882

28,832(203,382)
234,673(1,809)(1,508)

1,325
11,247

17,882
13,923

28,832505,176

(4) Consolidated Statements of Cash-Flows

Millions of yen
Fiscal 2007

Fiscal 2008
Cash flows from operating activities :Income before income taxes and minority interests
Adjustments to reconcile net income to net cash provided
by operating activities :Depreciation and amortization
Interest and dividend income (accrual basis)
Interest expense (accrual basis)
Exchange loss(gain) on foreign currency transactions
Amortization of goodwill
Equity in net (income) loss of unconsolidated subsidiaries
and affiliates
Loss (gain) on sales of investments in securities
Loss on valuation of investments in securities
Loss on disposal of tangible and intangible fixed assets
Gain on sales of tangible and intangible fixed assets
Changes in allowance for doubtful accounts
Changes in notes and accounts receivable
Changes in inventories
Changes in notes and accounts payable
Other
Interest and dividend income (cash basis)
Interest expense (cash basis)
Income taxes (cash basis)
Net cash provided by operating activities
Cash flows from investing activities :Acquisition of investments in securities
Proceeds from sales of investments in securities
Acquisition of tangible and intangible fixed assets
Proceeds from sales of tangible and intangible fixed assets
Other
Net cash used in investing activities
Cash flows from financing activities :Net increase (decrease) in short-term loans
Net increase (decrease) in commercial paper
Proceeds from long-term loans
Payments of long-term loans
Proceeds from bonds and notes
Redemption of bonds and notes
Payments for purchase of treasury stock
Cash dividends
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Increase (decrease) from the change in the number ofcompanies consolidated
Cash and cash equivalents at end of year21

281,079

605,485

273,744(25,085)
19,8133,487
1,103

244,038(24,555)
17,773
10,111
3,007(58,876)(52,507)(3,368)68,402
11,781(13,342)(1,850)37,598(171,535)(127,389)
17,81839,330(19,511)(205,660)
127,540

114
8,070(41,366)(5,283)
63,953(80,119)
43,008(53,836)
34,520(17,435)(229,203)
525,777(73,520)
39,664(295,584)
16,761
6,074(306,603)(195,554)
6,959(297,890)
58,444(10,080)(438,121)

95,22913,000185,119(85,159)
144,448(95,324)(178)(69,335)(17,590)
170,209(23,069)(31,923)
160,313(28,492)(28,000)
181,550(183,509)
79,707(43,074)(93,430)(69,966)(15,388)(200,604)(8,868)(121,817)
282,766-(635)

128,390

160,313(5) Matters or Circumstances Causing Material Doubt about Continuing Companies as Going Concerns
None(6) Basic Material Items for the Preparation of the Consolidated Financial Statements
The Company has omitted information other than those in (7) below, since there was no material change
compared with the latest Securities Report submitted in June 25, 2008.
(7) Change in the Basic Material Items for the Preparation of the Consolidated Financial Statements(a) Changes accompanying revisions in accounting principles:1) Inventories held for ordinary sales purposes were previously accounted for mainly by the purchase-cost
method based on the periodic average method. However, beginning with the fiscal year under review
accompanying the application of “Accounting Standards for Measurement of Inventories (ASBJ
Statement No. 9), the method of measurement of inventories was changed mainly to the cost method
based on the periodic average method (the method of reducing the book value of inventories when
their contribution to profitability declines).
As a result of this change, the gross margin and operating profit for the fiscal year under review wereboth ¥55,432 million lower, and ordinary profit and income before income taxes and minority interests
for the fiscal year under review were both ¥57,500 million lower than they would have been prior tothe change.
Please note that the effect of this change on segment information is as stated in the notes to thesegment information.
2) Previously, the accounting treatment for finance leases for which ownership is not transferred to thelessee followed methods applicable to ordinary rental transactions. However, “Accounting Standards
for Lease Transactions” (ASBJ Statement No. 13) and “Implementation Guidance on AccountingStandards for Lease Transactions” (ASBJ Guidance No. 16) were applied beginning with the fiscal
year under review. In addition, assets leased in finance leases, for which ownership is not transferred to
the lessee, are depreciated to zero residual value over the life of the assets using the straight-line
method.
As a result of this change, the effect on the consolidated financial statements for the fiscal year underreview was not material.
3) Beginning with the fiscal year under review, the Company has applied “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (Practical Issues Task Force Report No. 18).
22

As a result of this change, there was no effect on the consolidated financial statements for the fiscal
year under review.
(b) Changes other than those in (a) above
Income and expenses of overseas subsidiaries and affiliates are converted to yen. Previously, thisconversion was made at the rate prevailing on the closing date of the consolidated financial statements,
but beginning with the fiscal year under review, the conversion was made at the average rate during theaccounting period. This change was made to present the income and expense items more accurately,accompanying the growing importance of overseas subsidiaries and affiliates.
As a result of this change, for the fiscal year under review, net sales were ¥36,524 million higher, thegross margin was ¥10,010 million higher, operating profit was ¥8,666 million higher, and ordinary profit
and income before income taxes and minority interests were ¥26,292 million higher than they would havebeen prior to the changes.
Please note that the effect of this change on segment information is as stated in the notes to the segment
information.
(c) Supplementary Information
Beginning with the fiscal year under review, accompanying revisions in Japan’s income tax law, theCompany and its domestic consolidated subsidiaries have reviewed the useful lives of their property,
plant and equipment.
Accompanying this review and the changes in useful lives, for the fiscal year under review, depreciation
expense was ¥12,044 million higher, the gross margin was ¥11,163 million lower, operating profit was¥11,192 million lower, and ordinary profit and income before income taxes and minority interests were
¥11,802 million lower than they would have been prior to the changes.
Please note that the effect of this change on segment information is as stated in the notes to the segment
information.

23

(8) Notes of Consolidated Financial Statements(a) Consolidated Segment Information
1) Information of business segments

Fiscal 2008 (April 1, 2008 to March 31, 2009)
Millions of yen

Elimination ofConsolidated
intersegment
total
transactions

Steelmaking
and steelfabrication

Engineeringandconstruction

Urban
development

Chemicals

4,038,685

386,643

70,152

212,172

59,907

161,541

4,929,103(159,281)

4,769,821

Operatingprofit307,047

24,674

3,929

894△ 2,397

11,479345,627(2,696)

342,930

Total assets

4,183,826

298,053

224,247

136,185

30,441

128,082

5,000,836(130,155)

4,870,680

Depreciation

256,085

3,235

2,279

9,192

2,848

1,833

275,475(1,730)273,744

Capitalexpenditure283,653

6,011

8,512

8,470

1,649

1,645

309,942(4,204)

305,738

Sales

New
materials

SystemsolutionsTotal

Fiscal 2007 (April 1, 2007 to March 31, 2008)
Millions of yen

Elimination ofConsolidated
intersegment
total
transactions

Steelmaking
and steelfabrication

Engineeringandconstruction

Urban
development

Chemicals

3,994,526

359,884

93,839289,029

76,157

165,360

4,978,797(151,823)

4,826,974

Operatingprofit475,951

21,496

12,602

21,050559

14,756546,416(835)

545,580

Total assets

4,504,623

296,913

189,718

187,863

41,530121,289

5,341,938(148,440)

5,193,498

Depreciation

225,799

3,405

2,337

9,729

2,090

1,855

245,218(1,179)244,038

Capitalexpenditure

296,384

5,582

296

5,535

6,126

1,839

315,764(6,770)308,993

Sales

New
materials

Systemsolutions

Total

Note: 1. Method for business segment classification
The Company’s business segments are steelmaking and steel fabrication, engineering and construction, urban development,chemicals, new materials, and system solutions. When determining the business segment classification and method ofpresentation, the Company applies the basic policy that the classification and method of presentation should express accurately
and succinctly the distinctive features of each business domain.

24Notes: 2. Segment Main Products and Incidental Businesses
Business Segment
Steelmaking andSteel Fabrication

Engineering andConstruction

Urban
Development
Chemicals

New Materials
SystemSolutions

Main Products
Rails, sheet piles, H beams, other shapes; Bars, bars-in-coils, wire rods, special
wire rods
Flat-rolled
Heavy plates, medium plates, hot-rolled sheets, cold-rolled sheets; Tinplate, tinproducts
free steel, hot-dipped galvanized sheets, other metallic coated sheets, precoatedsheets; Cold-rolled electrical steel sheet
Pipe andTubulars: seamless, butt-welded, electric-resistance welded, electric-arc welded,
Steel
tubes
cold-drawn, and coated pipes and tubes
Materials
Specialty
Stainless steel, machine structural carbon steel, structural alloy steel, springsteel
steel, bearing steel, heat-resistant steel, free-cutting steel, piano wire rods, highstrength steel
SecondaryH-beam bridges, steel segments, gratings, PANZERMAST, vibration-damping
steel products sheets and plates, NS Louver, structural steel sheet members, columns, welding
materials, drums, bolts/nuts/washers, wire products, OCTG accessories,
building and civil engineering materials
Pig iron, steel ingots, others
Steelmaking pig iron, foundry pig iron, steel ingots; Iron and steel slag
products, cement, foundry coke
Design/maintenance/installation of machines/electrical equipment/measurement
Businesses incidental toapparatuses; Marine transport, port/harbor transport, land transport,
Steelmaking and Steelloading/unloading, warehousing, packaging; Material testing/analysis,
Fabrication
measurement of working environments, surveys on technical information,
operation and management of various facilities, security services, services
related to documentation of raw materials import, iron- and steelmaking plant
construction engineering, operating assistance, steelmaking know-how
provision, rolls
Other
Rolled titanium products, aluminum products, power supply, services and others
Iron- and steelmaking plants, industrial machinery and equipment, industrial furnaces
Resources recycling and environment restoration solutions, environmental plants, waterworks
Energy facilities and plants, chemical plants, storage tanks, on-land and offshore pipelines laying works
Various energy-related solutions
Offshore structure fabrication/construction, civil engineering work, bridge fabrication/erection, pipe piling work
Building construction, steel-structure construction, trusses, standardized buildings products, base-isolation andvibration-control devices
Steel sections

Urban development, condominiums/other real estate
Pitch coke, pitch, naphthalene, phthalic anhydride, carbon black, styrene monomer, bisphenol A, styrene resin,
epoxy resin, chemical products; Adhesive-free copper-clad laminated sheet for flexible printed circuit boards,
liquid crystal display (LCD) materials, organic EL materials
Rolled metallic foils, semiconductor bonding wire and microballs, carbon-fiber composite products, polysilicon
for solar cells, fine ceramics products, metal catalyst carriers for cleaning automotive emissions
Computer systems engineering and consulting services

Notes: 3. Changes in accounting principles(1) Inventories held for ordinary sales purposes were previously accounted for mainly by the purchase-cost method based on the
gross-average method. However, beginning with the current fiscal year, accompanying the application of “AccountingStandards for Measurement of Inventories (ASBJ Statement No. 9), the method of measurement of inventories was changed
to mainly the cost method based on the gross-average method (the method of reducing the book value of inventories when
their contribution to profitability declines).
As a result of this change, operating profit in the Steelmaking and Steel Fabrication segment was ¥54,963 million lower than
it would have been prior to the change. The change had minimal effect on the results in the other segments.
(2) Income and expenses of overseas subsidiaries and affiliates are converted to yen. Previously, this conversion was made at therate prevailing on the closing date of the financial statements, but beginning with the consolidated statements for the current
fiscal year, the conversion was made at the average rate during the accounting period. This change was made to present theincome and expense items more accurately, accompanying the growing importance of overseas subsidiaries and affiliates.
As a result of this change, net sales in the Steelmaking and Steel Fabrication segment were ¥31,334 million higher, andoperating profit was ¥8,495 million higher than they would have been prior to the change. As a result of this change, theeffect on the consolidated financial statements for the fiscal year under review was not material.

25

Notes: 4. Supplementary Information
Beginning with the fiscal year under review, accompanying revisions in Japan’s income tax law, the Company andits domestic consolidated subsidiaries have reviewed the useful lives of their property, plant and equipment.
Accompanying this review and the changes in useful lives, for the fiscal year under review, depreciation expense in
the Steelmaking and Steel Fabrication segment was ¥11,398 million higher and operating profit was ¥10,552
million lower than they would have been prior to the changes. The change had minimal effect on the results in theother segments.
2) Geographical Segments
For the consolidated fiscal year under review and the previous consolidated fiscal year, since the percentage of
total net sales and total assets in Japan accounted for more than 90% of the net sales and total assets of all
segments in total, the Company has omitted information by geographical segment.
3) Overseas Sales
FY2008 (April 1, 2008－March 31, 2009)
North America andAsia
Overseas sales(Millions of yen, %)other areas

1,023,924

Total

353,336

1,377,260

Net sales

4,769,821% of net sales

21.5

7.4

28.9

Notes: 1. Division by country or region is based on geographical proximity.
2. Main country and regional divisions other than Japan:
Asia: China, South Korea, Taiwan, and Thailand
North America and other areas: U.S.A.
3. Overseas sales are defined as sales made by the Company and its consolidated subsidiaries in countries orregions outside Japan.
FY2007 (April 1, 2007－March 31, 2008)
North America andAsia
Overseas sales(Millions of yen, %)other areas

1,059,982

Total

323,794

Net sales% of net sales

1,383,777
4,826,974

22.0

6.7

28.7

Notes: 1. Division by country or region is based on geographical proximity.
2. Main country and regional divisions other than Japan:
Asia: China, South Korea, Taiwan, and Thailand
North America and other areas: U.S.A.
3. Overseas sales are defined as sales made by the Company and its consolidated subsidiaries in countries orregions outside Japan.
26

(b) Per Share Information(Yen)
Fiscal 2008
(April 1, 2008－March 31, 2009)

Fiscal 2007
(April 1, 2007－March 31, 2008)

Net assets per share

265.24303.34

Net income per share

24.61

56.33

Net income per share after full dilution

23.71

53.52

Notes: Basis for calculations
1. Net income per share and net income per share after full dilution(Yen)
Fiscal 2008
(April 1, 2008－March 31, 2009)

Fiscal 2007
(April 1, 2007－March 31, 2008)

Net income per share
Net income

155,077 million

354,989 million

245 million

27 million

154,832 million

354,962 million

6,291,897,716 million

6,301,252,669 million

Net income adjustment value

3,985 million

3,955 million

Portion of minority interest

3,987 million

3,970 million(2) million(15) million

405,405,405 Shares

405,405,405 shares

Portion of euroyen preferred securities with exchange rights

405,405,405 Shares

405,405,405 shares

Summary of latent shares not included in the computation of net
income per share after full dilution, since these securities are
not dilutive――

Value not attributed to common shares
Net income attributed to common shares
Average number of outstanding common shares during theperiodNet income per share after full dilution

Portion of interest on investments accounted for by equity
methodIncrease in number of outstanding common shares

2. Net assets per share(Yen)

Total net assets
Amounts deducted from total net assets
Portion of minority interest
Net assets at fiscal year-end applicable to common shares
Number of common shares at fiscal year-end used in calculating
net assets per share27

End of fiscal 2008
(March 31, 2009)

End of fiscal 2007
(March 31, 2008)

2,174,809 million

2,413,954 million

506,371 million

505,203 million

506,126 million

505,176 million

1,668,437 million

1,908,750 million

6,290,378,550 Shares

6,292,503,857 shares5. Non-Consolidated Finacial Statements(1) Non-Consolidated Balance Sheets

ASSETS
Current assets :Cash and bank deposits
Notes and accounts receivable
Inventories
Deferred tax assets
Other
Less: Allowance for doubtful accounts

Millions of yen
March 31, 2008

March 31, 2009

31,356
122,807669,220
42,00091,100(7,269)49,262
129,428
483,527
31,50087,550(8,802)

949,215

772,467

299,829700,007
183,785
1,915
76,388
1,261,927

293,512703,636
189,226
62,2101,248,585

558
178
46
783

572
181
754

508,282552,387
104,153(2,740)1,162,083

914,592493,270
120,988(2,159)1,526,691

Total fixed assets

2,424,794

2,776,031

Total assets

3,374,010

3,548,498

Total current assets
Fixed assets :Tangible fixed assets :Buildings and structures
Machinery and equipment
Land
Lease assets
Construction in progress

Intangible fixed assets :Patents and utility rights
SoftwareLease assets

Investments and others :Investments in securities
Investments in subsidiaries and affiliates
Other
Less: Allowance for doubtful accounts

28

LIABILITIESCurrent liabilities :Notes and accounts payable
Short-term loans and portion of long-term loans
due within one year
Commercial paper
Bonds due within one year
Current portion of lease liability
Accrued expenses
Allowance for bonus of directors andcorporate auditors
Provision for environmental remediation
Other

Millions of yen
March 31, 2008

March 31, 2009

162,402

224,037

249,593

194,301

146,000
40,000761
217,714133,000
85,000214,843-210

124,283

5,315
188,146

940,754

1,044,853

Long-term liabilities :Bonds and notes
Convertible bonds
Long-term loans
Lease liability(excluding current portion)
Deferred tax liabilities
Accrued pension and severance costs
Reserve for repairs to blast furnaces
Other324,951
300,000
481,246
1,301
66,29736,572
14,051

219,984
300,000
362,679
142,900
56,032
38,521
14,319Total long-term liabilities

1,224,420

1,134,438

Total liabilities

2,165,175

2,179,291

419,524
114,104

419,524
114,145

91,569826,096
917,665(257,934)
1,193,360

90,435794,060
884,495(257,888)
1,160,277

15,053420
15,474210,275(1,345)208,929

Total net assets

1,208,835

1,369,206

Total liabilities and net assets

3,374,010

3,548,498

Total current liabilities

NET ASSETS
Shareholders'equity :Common stock
Capital surplus
Retained earnings :Special tax purpose reserve
Accumlated earnings carried forward
Treasury stock, at cost

Valuation and translation adjustments :Unrealized gains on available-for-sale securities
Deferred hedge income (loss)29

(2) Non-Consolidated Statements of Income

Fiscal 2008
Operating revenues :Net sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Operating profit
Non-operating profit and loss :Non-operating profit :Interest and dividend income
Other

3,128,694
2,713,934
414,759
161,794
252,965

2,782,944
2,243,326
539,617
163,488376,128

31,826
11,212
43,03927,75818,06645,825

21,73870,60392,342
203,661

19,18549,62368,808353,144

11,877

29,174

17,709-29,58629,174

66,462
66,462
166,786
80,400(22,600)
108,986

382,319
128,100
18,321
235,897

Non-operating loss :Interest expenses
Other
Ordinary profit
Special profit and loss :Special profit :Gain on sales of tangible fixed assets
Gain on sales of investments in securities
and investments in subsidiaries and affiliates
Special loss :Loss on valuation of investments in securities
Income before income taxes
Income taxes - current
Income taxes - deferred
Net income

Millions of yen
Fiscal 200730

(3) Non-Consolidated Statements of Changes in Net Assets
Millions of yen
Commonstock
Balance at March 31, 2008

Capitalsurplus419,524

Special tax
purposeresereve

114,145

90,435

Accumlated
earnings carriedforward794,060

Withdrawal of special tax purpose reserve(9,986)

9,986

Reserve of special tax purpose reserve

11,120(11,120)

Cash dividends(69,335)

Net income for fiscal year 2008

108,986

Acquisition of treasury stock

Treasurystock,
at cost(257,888)

Deferredhedge
income(loss)

210,275(1,345)(195,221)

1,766

(178)

Disposal of treasury stock

(40)

133

Net change due to demerger(6,480)

Other change for fiscal year 2008(net)Total change for fiscal year 2008
Balance at March 31, 2009

Unrealized
gains onavailable-forsale securities

-

(40)

1,134

32,035(45)(195,221)

1,766

419,524

114,104

91,569826,096(257,934)

15,053

420

Millions of yen
Commonstock
Balance at March 31, 2007

419,524

CapitalsurplusSpecial tax
purposeresereve

111,564

81,591

Accumlated
earnings carriedforward636,973

Withdrawal of special tax purpose reserve(8,233)

8,233

Reserve of special tax purpose reserve

17,076(17,076)

Cash dividends(69,966)

Net income for fiscal year 2007

235,897

Acquisition of treasury stock

Treasurystock,
at cost(168,261)

Deferredhedge
income(loss)

393,813(309)(183,538)(1,036)(93,430)

Disposal of treasury stock

2,580

3,802

Other change for fiscal year 2007(net)Total change for fiscal year 2007
Balance at March 31, 2008

Unrealized
gains onavailable-forsale securities

419,524

2,580

8,843

157,087(89,627)(183,538)(1,036)

114,145

90,435794,060(257,888)

210,275(1,345)31

(4) Matters or Circumstances Causing Material Doubt about Continuing Companies as Going Concerns
None

32

[Reference]

Recent Quarterly Operating Results
Fiscal 2008 (April 1, 2008 to March 31, 2009)

Fiscal 2007 (April 1, 2007 to March 31, 2008)

1st quarter2nd quarter

1st half

3rd quarter

4th quarter2nd half

Fiscal 2008

Forecast for
fiscal 2008
(data released on
Jan. 29, 2009)

1st quarter2nd quarter

1st half

3rd quarter

4th quarter2nd half

Fiscal 2007

Apr.2008-June.2008

July 2008-Sep.2008

Apr.2008-Sep.2008

Oct.2008-Dec.2008

Jan.2009-Mar.2009

Oct.2008-Mar.2009

Apr.2008-Mar.2009

Apr.2008-Mar.2009

Apr.2007-June.2007

July 2007-Sep.2007

Apr.2007-Sep.2007

Oct.2007-Dec.2007

Jan.2008-Mar.2008

Oct.2007-Mar.2008

Apr.2007-Mar.2008\million\million\million\million\million\million\million\million\million\million\million\million\million\million\million

Sales

1,198,582

1,403,599

2,602,181

1,228,035

939,604

2,167,639

4,769,821

4,750,000

Sales

1,115,751

1,200,599

2,316,350

1,189,842

1,320,781

2,510,624

4,826,974

Steelmaking andsteel fabrication

1,030,296

1,203,466

2,233,762

1,067,621

737,301

1,804,922

4,038,685

4,000,000

Steelmaking andsteel fabrication

935,664

1,027,256

1,962,920

988,389

1,043,217

2,031,606

3,994,526

Engineering andconstruction

72,45696,281

168,738

92,697125,207

217,905

386,643

380,000

Engineering andconstruction

71,51979,123

150,642

82,547

126,694

209,241

359,884

Urban development

11,08914,42525,515

14,36430,272

44,637

70,15270,000Urban development

16,355

15,10331,45825,10337,27762,38093,839Chemicals

64,71572,253

136,969

44,29430,90975,203

212,172

220,000

Chemicals

80,227

69,252

149,479

71,84067,708

139,549

289,029

New materials

19,242

16,64535,88814,517

9,501

24,01959,90755,000New materials

16,92919,102

36,031

20,96019,16540,12676,157

System solutions

34,84941,59476,44432,88452,21285,097

161,541

165,000

System solutions

32,95343,01375,96636,39652,99789,393

165,360

Elimination ofintersegment
transactions(34,069)(41,067)(75,136)(38,344)(45,800)(84,144)(159,281)(140,000)

Elimination ofintersegment
transactions(37,899)(52,250)(90,149)(35,394)(26,279)(61,674)(151,823)

119,704

128,709248,413148,067▲ 53,550

94,517

342,930

360,000

129,464

134,993

264,457

143,648

137,474

281,123545,580【10.0%】【9.2%】【9.5%】【12.1%】【▲5.7%】【4.4%】【7.2%】【7.6%】【11.6%】【11.2%】【11.4%】【12.1%】【10.4%】【11.2%】【11.3%】

111,661

117,976

229,637

145,532▲ 68,123

77,409307,047

335,000【10.8%】【9.8%】【10.3%】【13.6%】【▲9.2%】【4.3%】【7.6%】【8.4%】

Operating profit

Operating profit

Steelmaking andsteel fabrication
Engineering andconstruction

2,210

3,780

5,991

3,738

14,944

18,683

24,67420,000【3.1%】【3.9%】【3.6%】【4.0%】【11.9%】【8.6%】【6.4%】【5.3%】

1,082

1,173

2,255

827

846

1,673

3,929

4,000

【9.8%】【8.1%】【8.8%】【5.8%】【2.8%】【3.7%】【5.6%】【5.7%】

3,467

4,573

8,040

▲ 3,269▲ 3,876▲ 7,146894

0【5.4%】【6.3%】【5.9%】【▲7.4%】【▲12.5%】【▲9.5%】【0.4%】

【 - 】

▲ 3

282

279

▲ 791

▲ 1,885▲ 2,677▲ 2,397▲ 2,000【▲0.0%】【1.7%】【0.8%】【▲5.5%】【▲19.8%】【▲11.1%】【▲4.0%】【▲3.6%】

1,560

2,814

4,374

1,983

5,120

7,104

11,47913,000【4.5%】【6.8%】【5.7%】【6.0%】【9.8%】【8.3%】【7.1%】【7.9%】

124,978

115,982

240,960

475,951【12.6%】【11.1%】【11.9%】【11.9%】

3,715

2,909

6,624

5,619

9,252

14,871

21,496【5.2%】【3.7%】【4.4%】【6.8%】【7.3%】【7.1%】【6.0%】

3,298

1,072

4,370

3,390

4,841

8,231

12,602【20.2%】【7.1%】【13.9%】【13.5%】【13.0%】【13.2%】【13.4%】

7,434

5,668

13,102

5,490

2,456

7,947

21,050【9.3%】【8.2%】【8.8%】【7.6%】【3.6%】【5.7%】【7.3%】

20

194

214

499

▲ 155

344

559

【0.1%】【1.0%】【0.6%】【2.4%】【▲0.8%】【0.9%】【0.7%】(274)(1,892)(2,166)

46

(575)

(529)

(2,696)(10,000)

144,087

118,151

262,239

148,190▲ 74,289

73,901

336,140

360,000【12.0%】【8.4%】【10.1%】【12.1%】【▲7.9%】【3.4%】【7.0%】【7.6%】

2,890

3,540

6,430

3,174

5,152

8,326

14,756【8.8%】【8.2%】【8.5%】【8.7%】【9.7%】【9.3%】【8.9%】(1,865)589(1,276)

496

(55)

440

(835)

System solutions

System solutions

Net income pershare

234,990【12.0%】New materials

New materials

Net income

121,021【11.8%】

Chemicals

Chemicals

Ordinary profit

Engineering andconstruction

113,969【12.2%】

Urban development

Urban development

Elimination ofintersegment
transactions

Steelmaking andsteel fabrication

82,761

78,915

161,677

50,435▲ 57,035▲ 6,599

155,077

175,000【6.9%】【5.6%】【6.2%】【4.1%】【▲6.1%】【▲0.3%】【3.3%】【3.7%】

\

\

\

\

\

\

\

\

13.15

12.54

25.69

8.02

▲ 9.11▲ 1.09

24.61

27.81

【 】 : Return on sales( ) in "Elimination of intersegment transactions" row indicate negative numbers

Elimination ofintersegment
transactions
Ordinary profit

Net income

Net income pershare

148,691

135,321284,012150,656

129,449

280,106

564,119【13.3%】【11.3%】【12.3%】【12.7%】【9.8%】【11.2%】【11.7%】

86,701

89,708

176,409

86,64791,932

178,580

354,989【7.8%】【7.5%】【7.6%】【7.3%】【7.0%】【7.1%】【7.4%】

\

\

\

\

\

\

\

13.70

14.25

27.96

13.77

14.61

28.38

56.33

Nippon Steel Corporation
April 28, 2009

Nippon Steel Corporation
Code Number: 5401
Listings: Tokyo, Osaka, Nagoya, Sapporo and Fukuoka Stock Exchanges
Contact: Hiroyuki Marukawa, General Manager, Public Relations Center-Tel: 81-3-3275-5014

Supplementary Information on the Financial Resultfor Fiscal 2008
Japanese Steel Industry
1. Crude Steel Production(million tons)

2007FY
2008FY

1st quarter 2nd quarter
29.89
29.91
31.06
30.45

1st half
3rd quarter 4th quarter
59.80
30.88
30.84
61.51
26.40
17.60

2nd half
61.71
44.00

total
121.51105.502. Inventory Volume
At the end of:
June
July
Aug.
Sep.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sep.
Oct.
Nov.
Dec.
Jan.
Feb.

2007
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2009
2009

Inventory at
manufacturers
and distributors(million tons)
5.43
5.49
5.63
5.61
5.63
5.52
5.66
5.62
5.38
5.18
5.23
5.35
5.36
5.12
5.46
5.58
5.72
5.85
5.88
5.77
5.47

Inventory/shipment ratio(%)(101.8)(106.0)(113.6)(107.1)(103.6)(105.4)(114.1)(112.1)(104.3)(90.1)(102.9)(104.7)(101.3)(94.0)(119.8)(110.3)(116.4)(136.1)(155.0)(165.2)(171.4)

Rolled sheets *1(million tons)
4.08
4.11
4.25
4.19
4.16
4.10
4.09
4.18
4.08
4.02
4.04
4.11
4.09
4.07
4.29
4.41
4.47
4.56
4.71
4.73
4.51

H-flange beams *2(million tons)
0.270
0.256
0.253
0.267
0.278
0.281
0.279
0.264
0.229
0.214
0.210
0.219
0.236
0.243
0.248
0.261
0.273
0.275
0.272
0.261
0.234

*1 Hot-rolled, cold-rolled and coated sheets*2 Inventories of distributors dealing with H-flange beams manufactured by Nippon Steel Corporation-1-

Nippon Steel Corporation

Nippon Steel (Non-consolidated basis)
3. Pig Iron Production (Nippon Steel Corporation and Hokkai Iron & Coke Co., Ltd)(million tons)

2007FY
2008FY

1st quarter 2nd quarter
7.67
7.96
8.04
8.04

1st half
3rd quarter 4th quarter
15.63
8.09
8.20
16.07
7.47
4.95

2nd half
16.29
12.41

total
31.92
28.49

4. Crude Steel Production(Consolidated basis)(million tons)

2007FY
2008FY

1st quarter 2nd quarter
8.72
8.92
9.16
9.06

1st half
3rd quarter 4th quarter
17.64
9.24
9.36
18.23
7.97
5.04

2nd half
18.59
13.01

total
36.23
31.24

(Non-consolidated basis)(million tons)

2007FY
2008FY

1st quarter 2nd quarter
7.99
8.22
8.30
8.26

1st half
3rd quarter 4th quarter
16.21
8.37
8.53
16.57
7.37
4.67

2nd half
16.90
12.04

total
33.11
28.61

5. Steel Products Shipment(million tons)

2007FY
2008FY

1st quarter 2nd quarter
7.89
8.15
8.08
8.29

1st half
3rd quarter 4th quarter
16.04
8.23
8.63
16.37
7.12
4.71

2nd half
16.86
11.83

total
32.90
28.20

6. Average Price of Steel Products(thousands of yen / ton)

2007FY
2008FY

1st quarter 2nd quarter
78.3
80.3
92.0
108.2

1st half
3rd quarter 4th quarter
79.3
80.2
80.2
100.2
112.4
108.5

2nd half
80.2
110.8

total
79.8
104.7

7. Export Ratio of Steel Products (Value basis)(%)

2007FY
2008FY

1st quarter 2nd quarter
33.3
34.9
31.8
35.0

1st half
3rd quarter 4th quarter
34.1
32.3
33.0
33.5
31.8
30.1

2nd half
32.6
31.2

total
33.4
32.5

8. Foreign Exchange Rate(￥/US$)

2007FY
2008FY

1st quarter 2nd quarter
120
119
104
108

1st half
3rd quarter 4th quarter
119
113
108
106
99
93

-2-

2nd half
111
97

total
115
102

Nippon Steel Corporation
9. Unrealized Gains on Available-for-Sale Securities

Consolidated
Non-consolidated【Nikkei 225】

2008FY
38.0(22.6)
25.2(15.0)【8,110yen】

2007FY
393.6(234.6)
352.7(210.2)【12,526yen】* Figures in parentheses were after adopting deferred tax accounting.

10. Amount of Capital Expenditure and Depreciation･Capital Expenditure
300.0
220.0

(billion yen)
2007FY
310.0
230.0

273.7
196.3

(billion yen)
2007FY
244.0
174.9

2008FY
Consolidated
Non-consolidated･Depreciation
2008FY
Consolidated
Non-consolidated-3-(billion yen)difference-355.6(-212.0)-327.5(-195.2)【-4,416yen】

<For Reference>
Materials Price
Nickel・Chromium
30.0

Nickel(LME US$/lb)

6.0

FeCr
(US￠/lb-Cr)

25.0

5.0

HCFeCr

20.0

15.0

4.0

3.0

Nickel

10.0

2.0
1.97

5.0

1.0
0.77

5.01
LCFeCr
(RN 0.1% US)

0.0
03

04

05

06

07

08

09

0.0
Apr.

Cold Pig Iron
1,000

(US$/ｔ CIF Korea)

800

600

400

275

200

0

03

04

05

06

07

08

09

Apr.